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HomeMy WebLinkAboutResolution - 2010-R0472 - Tax Abatement Agreement With R&N Investments II, LLC. At 2510 Marsha Sharp - 09/27/2010Resolution No. 2010-RO472 September 27, 2010 Item No. 5.23 RESOLUTION WHEREAS, the City Council has determined to give notice of its intent to enter into a Tax Abatement Agreement with TAO-320PS1, LP & R&N Investments II, LLC.; and WHEREAS, V.T.C.A. Tax Code Section 312.2041 requires notice of intent of the City Council to be given to the presiding officer of the governing body of each taxing unit in which the property to be subject to the Tax Abatement Agreement is located; NOW BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the City Secretary give notice as set forth in Exhibit "A" of the intention of the City Council to enter into a Tax Abatement Agreement with TAO-320PS1, LP & R&N Investments II, LLC., said notice to be given to the presiding officers of each governing body of each taxing unit having jurisdiction in assessing taxes on the property located at 2510 Marsha Sharp Freeway which is further described as Tract C-1, R and N Isom Addition to the City of Lubbock, Lubbock County, Texas. I Passed by the City Council on September 27 2010. TOM MARTIN, MAYOR ATTEST: Reb cc�Garz�aCi� Secret APPR VED AS TO CONTENT: Rob Alli n, Ass' t 'ty Manager Development Services APPROVED AS TO FORM: Linda L. Chamales Economic Development Attorney Lc: cityatt/Linda/ Notice of Intent TAO: R & N August 11, 2010 Resolution No. 2010-RO472 EXHIBIT "A" NOTICE OF INTENT OF THE CITY COUNCIL OF THE CITY OF LUBBOCK TO ENTER INTO AN AGREEMENT TO ABATE TAXES ON REAL PROPERTY IMPROVEMENTS LOCATED AT 2510 MARSHA SHARP FREEWAY WHICH IS FURTHER DESCRIBED AS TRACT C-1, R AND N ISOM ADDITION TO THE CITY OF OUBBOCK, LUBBOCK COUNTY, TEXAS Notice is hereby given that the City Council of the City of Lubbock intends to enter into an Agreement with TAO-320PS 1, LP & R&N Investments II, LLC to abate taxes on improvements to real property located within Enterprise Zone 3.01-3 created by Ordinance No. 2007-00116 and covering all of the subject property. Notice is further given that the City Council of the City of Lubbock will consider authorizing the Mayor of the City to execute a contract between the City, TAO-32OPS1, LP, and R&N Investments II, LLC for tax abatement, a draft copy of said Agreement is attached to this notice as Exhibit "A-1" and made a part hereof for all purposes. Notice is further given that the City Council will consider this matter at its meeting held in the City Council Chamber, City Hall, 1625 13`h Street, City of Lubbock, on the 14`h day of October, 2010, at approximately 9:30 o'clock a.m. Exhibit A-1 AGREEMENT STATE OF TEXAS § COUNTY OF LUBBOCK § Resolution No. 2010-RO472 This Agreement is between the City of Lubbock, Texas, a home rule municipality of the State of Texas (hereinafter called "City"), and TAO-320PS1, LP (hereinafter called "TAO") & R&N Investments II, LLC (hereinafter called "Owner"); WITNESSETH: WHEREAS, City received an application for tax abatement from TAO and Owner on the 16th day of June 2010, for improvements to real property located at 2510 Marsha Sharp Freeway, Tract C-1, R and N Isom Addition to the City of Lubbock, Lubbock County, Texas, which is further described in "Exhibit A"; and WHEREAS, upon review of the above application it was determined that the facility and real property is located in Enterprise Zone 3.01-3 designated by the City for commercial and industrial tax abatement in Ordinance No. 2007- 00116 covering the above described property; and WHEREAS, the Guidelines and Criteria Governing Tax Abatement For Commercial Projects in Designated Enterprise Zones in the City of Lubbock were adopted October 20, 2009 by Resolution No. 2009-RO444 of the City Council of the City of Lubbock. A copy of the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock is attached as Exhibit `B" and incorporated herein as if fully set forth; and WHEREAS, the City complied with all the requirements set forth in V.T.C.A., Tax Code, Section 312.201; and WHEREAS, the City complied with all the criteria and guidelines as set forth in the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock; and WHEREAS, the property described in "Exhibit A" is located in Enterprise Zone 3.01-3 and V.A.T.C., Tax Code, and Sec. 312.2011 provides that designation as an enterprise zone constitutes designation as a reinvestment zone without further action; and WHEREAS, TAO and Owner's application is for the construction of a new facility; and WHEREAS, V.T.C.A. Tax Code Sec. 312.002 and Section IV of the Guidelines and Criteria governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock recognize construction of a new facility as being eligible for tax abatement status; and WHEREAS, the City Council hereby finds that all of the Guidelines and Criteria Governing Commercial Tax Abatement, as adopted by Resolution No. 2009-RO444 have been met by TAO and Owner; and WHEREAS, the location of the facility and surrounding real property, which are to be the subject matter of this Agreement, are attached hereto as Exhibit "C" and made a part of this Agreement for all purposes; and NOW THEREFORE, for and in consideration of the premises and of the mutual terms, covenants and conditions herein contained the City, TAO, and Owner do hereby agree as follows: SECTION 1. Term. This Agreement shall commence January 1 of the tax year after the required improvements are substantially completed and shall expire five (5) years after said date. SECTION 2. Base Year. The base year applicable to real property, which is the subject of this Agreement, shall be 2010, and the assessed value of the real property shall be the assessed value applicable to such property for said year. SECTION 3. Base Year Taxes. The taxes upon the real property shall be paid in accordance with the assessed value of such property for the base year. Base year taxes upon the real property are thus not abated. SECTION 4. Abatement of Increase in Base Year Tax. In accordance with V.T.C.A., Tax Code, Section 312.204, real property taxes applicable to the real property subject to this Agreement shall be abated only to the extent said value for any given year within the term of this Agreement exceeds the base year taxes set forth above. SECTION 5. Prope - Ineligible for Tax Abatement. The property described and set forth in Section IV(5) of the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock is incorporated by reference herein as if fully set out in this Agreement and fully describes the property ineligible for tax abatement. TAX ABATEMENT AGREEMENT TAO-320PS1, LP and R&N Investments II, LLC PAGE 2 SECTION 6. Exemption from Tax. The City covenants and agrees to exempt from taxation, in accordance with Section 4 above, the following properties: (a) All proposed new improvements to be placed upon the property at 2510 Marsha Sharp Freeway, Tract C-1, R and N Isom Addition to the City of Lubbock, Lubbock County, Texas, which is further described in Exhibit "A". SECTION 7. Economic Qualifications. TAO agrees to expend funds necessary to qualify for tax abatement by constructing a new facility, as set forth in Section IV(9)(a) of the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock (Exhibit `B") on the property described in Exhibit "A". A description of the kind, number and location of all proposed improvements is attached in TAO and Owner's application, Exhibit "C" and incorporated herein as if fully set forth. SECTION 8. Value of Improvements. In accordance with V.T.C.A., Tax Code, Section 312.204(a), which requires the Owner of the property to make specific improvements or repairs to the property in order to be eligible for tax abatement, TAO will expend one million one hundred thousand dollars ($1,100,000) for the construction of a new facility to be located within the enterprise zone created by Ordinance No. 2007-00116. SECTION 9. City Access to Property. TAO and Owner covenants and agrees that City shall have access to the property, which is the subject matter of this Agreement, upon reasonable notice and during normal business hours, and that municipal employees or their agents shall be able to inspect the property to insure compliance with the terms and conditions of TAO and Owner's application for tax abatement, attached as Exhibit "C", and this Agreement. SECTION 10. Portion of Tax Abated. City agrees, during the term of this Agreement, to abate taxes on eligible property according to the following schedule. Year 1: 100% Year 2: 80% Year 3: 60% Year 4: 40% Year 5: 20% SECTION 11. Type of Improvements. TAO proposes to construct a new facility as described in Exhibit "C". TAO further states that the proposed improvements to the property above mentioned will commence on the 15th day of TAX ABATEMENT AGREEMENT TAO-32OPS1, LP and R&N Investments II, LLC PAGE 3 July, 2010, and shall be completed within approximately six (6) months from said date. TAO may request an extension of the above date from City in the event circumstances beyond the control of TAO necessitate additional time for completion of such improvements and such consent shall not unreasonably be withheld. TAO shall provide a copy of the certificate of occupancy or other proof of completion within ten days of completion of improvements. SECTION 12. Limitation on Use. TAO and Owner agree to limit the use of the property set forth in Exhibit "A" to commercial and/or industrial uses as those terms are defined in the zoning ordinances of the City of Lubbock and to limit the uses of the property to uses consistent with the general purpose of encouraging development of the enterprise zone during the term of this agreement. SECTION 13. Recapture. TAO and Owner agree to be bound by and comply with all the terms and provisions for recapture of abated taxes in the event of default by TAO and Owner pursuant to law and as set forth in Guidelines and Criteria for Tax Abatement adopted by Resolution No. 2009-RO444 of the City Council of the City of Lubbock. SECTION 14. Certification. TAO and Owner agree to certify annually in writing to the governing body of each taxing unit that TAO and Owner is in compliance with the terms of the Agreement. SECTION 15. Transfer of Pro e . TAO and Owner acknowledges that the purpose of tax abatement is to increase the City of Lubbock tax base, and TAO and Owner therefore agree that if the property described in Exhibit "A" is sold or transferred during the term of the tax abatement agreement to any entity that is not required to pay property taxes for this property, TAO and Owner agree to reimburse the taxing jurisdictions for any tax abatement that was received on the property during the term of the agreement and to make a payment in lieu of taxes in an amount equal to the taxes that would have been due to the jurisdictions for each year remaining in this Agreement. It is understood that TAO and/or Owner may lease or license the use of all or some portion of the property described in Exhibit "A" to a tax exempt entity or entities, and such lease or leases shall not be considered a sale or transfer for purposes of this tax abatement agreement; however, if TAO or Owner convey by deed the fee simple title of the property to a tax exempt entity during the term of this agreement, then the reimbursement and payment required by this Section 15 will be required. SECTION 16. Compliance. The City may cancel or modify this Agreement if TAO and Owner fail to comply with the Agreement. TAX ABATEMENT AGREEMENT TAO-320PS1, LP and R&N Investments II, LLC PAGE 4 SECTION 17. Notices. Notices required to be given by this Agreement shall be mailed, certified mail return receipt requested, to the following addresses: CITY OF LUBBOCK Assistant City Manager Development Services P.O. Box 2000 Lubbock, Texas 79457 TAO-320PS1, LP Clayton Isom 905 Avenue K Lubbock, Texas 79401 Phone: 806-722-0660 R & N Investments, LLC Clayton Isom 905 Avenue K Lubbock, TX 79401 Phone: 806-722-0660 TAX ABATEMENT AGREEMENT TAO-320PS1, LP and R&N Investments II, LLC PAGE 5 SECTION 18. Effective Date. Notwithstanding anything contained herein to the contrary, this Agreement shall not be effective until such time as it has been finally passed and approved by the City Council of the City of Lubbock. EXECUTED on TAO-320PS1, LP CLAYTON ISOM ATTEST: BLAKE CARPENTER R & N INVESTMENTS, LLC CLAYTON ISOM ATTEST BLAKE CARPENTER 2010. CITY OF LUBBOCK TOM MARTIN, MAYOR ATTEST: Rebecca Garza City Secretary APPROVED AS TO CONTENT Rob Allison, Assistant City Manager Development Services APPROVED AS TO FORM: Linda L. Chamales Economic Development Attorney Lc: cityatt/Linda/ Tax Abatement Agmt — TAO-32OPS 1, LP and R&N Investments II, LLC July 19, 2010 TAX ABATEMENT AGREEMENT TAO-32OPS 1, LP and R&N Investments II, LLC PAGE 6